It’s better when a pension scheme says “we’re in it together”; when young people take responsibility for their older selves, they’ll have a retirement wage that lives forever; (that’s the first time that CDC has been plugged by Oasis BTW).

Being a few years older than David, I know what it is like to stare your financial future in the face.

Here is David’s argument in summary.

David Brooks: Why pensions are not fit for purpose

For greater security when you’re at your most insecure – when you walk away from work -there’s the pension you saved for, it will live forever.

Here is David on behalf of those who are younger than him

Policymakers spend little time discussing what support should look like for people in the decades between education and financial stability. Yet these years can determine everything that follows – not just financially, but for broader social outcomes, like family formation, housing demand and economic mobility. It is not just about the ability to purchase a first home, start a family, relocate for work, or take on entrepreneurial risks.

It’s also the ability to build wealth rather than service debt. Get these years right and retirement outcomes often improve naturally. Home ownership, lower debt burdens and stronger lifetime earnings can compound just as powerfully as investment returns.

Of course we cannot treat all young people the same. There are enormous differences between those who have cashflow and those who are hard up and if you have kids and a mortgage or rent it is hard and if you live at your family home and have no family you aren’t.

This is why there is an opt-out to pensions and it’s miraculous that against all economic logic, opt-out rates from pension saving is so low.

But I can remember the remarkable optimism that I and my friends had when in the first twenty years of my career and I was prepared to borrow to get rich or at least to get to a point when I was self-sufficient from work. It is not logical but it is wonderfully right!

As Rory Sutherland told a Pensions UK audience in April, we do too little to advertise the help we get to save. We have tax-relief, most of us will still get the benefit of salary sacrifice into the future. Even if you don’t understand compound interest, the idea of tax free growth sounds good and we are now not being sold a manky insurance policy but participation in a workplace pension that puts value for money before the salesman’s back pocket.

Pensions are getting a better deal and they will take another step in the right direction when young people can start buying retirement income through a CDC scheme.

I know that David’s arguments were being made 20 years ago – even 40 years ago and I’m quite sure they will not go away. But for most people the balance between deferring pay for up to 40 years is a damned good idea and one that most young people get. It’s just like believing we will live to 100! We may not know it will happen but we so want it to be true!

“Live Forever”